MNI POLICY: Fed's Bowman Optimistic Over Housing Sector

By Evan Ryser

     WASHINGTON (MNI) - National indicators suggest a positive outlook for the

housing sector over the next several quarters despite headwinds due to tight

labor markets hitting some building companies and a declining presence of

community banks, Federal Reserve Board Governor Michelle Bowman said Thursday. 

     The economy is in a good place with a baseline outlook for continued

moderate growth over the next few years, Bowman said. Unemployment is expected

to remain low and inflation though it has been muted is expected to rise

gradually to the FOMC's 2% objective. 

     "I remain optimistic about the outlook for housing," Bowman said before the

Home Builders Association of Greater Kansas City. 

     Bowman however addressed what she saw as two challenges currently facing

the housing sector. 

     "The first relates to the difficulties that some employers face, including

homebuilders, in finding and retaining qualified and skilled workers," Bowman

said. "[I]t's extremely difficult to find and hire workers, skilled or

otherwise."

     Bowman said she is "hopeful" that a recently renewed and broad focus on

workforce development initiatives by the public and private sector will

encourage more people to rejoin the construction trades. 

     The second challenge Bowman highlighted is the declining presence of

community banks in the consumer real estate mortgage market. "As regulatory

burdens have risen, many community banks have significantly scaled back their

lending or exited the mortgage market altogether." 

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com

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